The Nifty index recently climbed 1,000 points from 24,500, which was accurately predicted using Elliott Wave analysis. The rise was supported by the US-India Trade Deal, serving as both a fundamental driving force and a part of a technical framework.
Wave Patterns in Key Stocks
We looked at the wave patterns of Tata Steel and KNR Constructions. The analysis raises questions about whether it’s wise to take profits or keep investing, along with predictions for the days ahead. Experts in Elliott Wave Theory are continuously monitoring the market to evaluate possible future targets for the Nifty and Bank Nifty.
In other market news, EUR/USD is stable above 1.1800 while traders wait for Eurozone data. USD/JPY has gained strength amid political uncertainties in Japan. Gold prices have bounced back above $4,950 after a sell-off, driven by safe-haven demand amid US-Iran tensions.
In the crypto space, Ripple is down slightly, trading just under $1.60. The overall market has been declining since January 2025. FXStreet remains a go-to source for financial updates, though it does not offer investment advice, emphasizing the risks of open market investments.
We successfully identified the reversal from the 24,500 low, and the subsequent 1,000-point rally shows that a strong market advance is underway. This indicates the start of a new bull market rather than just a temporary bounce. For derivative traders, this is a moment to switch from a defensive to an offensive approach in the coming weeks.
The Impact of the US-India Trade Deal
The recent US-India Trade Deal is a key factor driving this technical setup. This positive momentum is reinforced by a surge in Foreign Institutional Investor (FII) inflows, which exceeded $6 billion in January 2026, marking a strong rebound from the outflows seen in late 2025. This influx of capital, along with a manufacturing PMI that remains above 57, suggests a robust economic climate that supports higher index values.
Traders should consider purchasing Nifty call options with strike prices of 26,000 and 26,500 for the February and March expiries, given the strong upward trend. For those holding futures, it’s wise to stay in the market and avoid taking profits now. The strong breakout indicates that any pullbacks are likely to be minor and could provide additional buying chances.
However, geopolitical risks persist; for example, gold prices remain around $4,985 amid ongoing US-Iran tensions. To hedge against unexpected market downturns, cautious traders might want to buy out-of-the-money Nifty put options, like the 25,000-strike puts. This offers a cost-effective safety net.
In terms of volatility, the India VIX has decreased since late 2025 but is still above its historical average, making direct long options more costly. In this context, bull call spreads become attractive as they limit maximum losses and lessen the impact of high implied volatility. We expect volatility to continue decreasing as the Nifty heads toward its next significant targets, benefiting those holding long option positions.
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